Independent retailers share their top promotional techniques for growing footfall and basket spend by giving their stores the edge over the competition.
With consumers across the UK struggling to make ends meet, the mults are competing hard for their custom as they encroach ever further into c-store territory with price guarantees and loyalty discounts galore. Only last month, Morrisons rolled out its loyalty card offer to company-owned convenience stores, while Sainsbury’s has just extended its Aldi Price Match into convenience stores. There’s no doubt about it – the pressure is on to keep customers coming through your door. So what promotional strategies are independent retailers adopting to communicate value?
For the newly opened Nisa on Kirkcaldy High Street, running a competitive meal deal and strong discounts on everyday essentials are helping to coax new customers over the threshold.
“Living costs are going up and people don’t have the kind of money to spend in a convenience store,” says owner Imran Haqqan, who also owns two other Nisa stores in the surrounding area.
In October, he introduced a roll and large Costa coffee deal for £4.99, but in November he reduced this by 20% to a bargainous £3.99. “I dropped the deal to £3.99 because I need to get more people in and you need people to think they’re getting something for nothing,” he says. “I make a small profit, but it boosts coffee and rolls and if people like them, they might buy a roll and something else next time.”
He is also going all out on essentials like bread and milk. A Warburtons Toastie loaf is price marked at £1.55, but the shop sells it at £1.30, while Grahams Milk 2l is £1.49, which the store promises is ‘the cheapest on the high street’. “It’s a brand-new store and I need to push all the time to get loyalty and regular customers,” explains Imran.
Loyal following
Baba’s Kitchen in Bellshill, North Lanarkshire, has also picked up on the increasing importance of offering value. “One hundred per cent – value is more important today,” says owner Umar Majid. Consumer demand led to him introducing a loyalty card for his Smokin’ Bean coffee machine last November, which allows consumers to get their 10th coffee free. “We had the cards, but we weren’t going to run it initially, but a lot of people were asking for them, so we handed them out and we’d had 15 or 20 cards already handed back in the first few weeks.”
The store has also been shouting loud and proud about its new Eco Bags. The bargain bags offer over £14-worth of short-dated, but top-quality goods for just £3.50 – saving the store on wastage and saving customers 75%. “People are always looking for value through smaller stores,” says Umar. “We’ve had a great reaction to the Eco Bags.”
He also offers Too Good To Go (TGTG) bags, but is phasing these out in favour of the Eco Bags, which means he no longer has to pay commission. He claims that he always got high scores on TGTG’s internal reviews because he was careful to offer variety. “They don’t want you giving people six packs of meat!” he says. And so he is equally mindful of this with the Eco Bags, which can contain a wide range of goods, including in-store baked foods, packaged bread, cheese and snacks.
Customers wanting an Eco Bag are directed to the store’s website, meaning it’s a useful way of building the store’s online customer base. And for some cash-conscious shoppers, Umar believes it is the deciding factor in choosing Baba’s over another outlet. “For example, a regular customer will place an Eco Bag at the top of her [online] order every day, then her cigarettes, then she gets her hot rolls, soft drinks and freezer foods – if we didn’t have the Eco Bag I don’t think she’d be shopping with us,” he says.
Pounding away
Guna Sud has also been winning over customers with unbeatable value at RaceTrack Pitstop, which comprises 11 stores in and around Glasgow. “One pound deals in value bays has been my side project,” Guna explains. The initiative was first introduced at the firm’s Wishaw site. “It was next to a Home Bargains, so it already had customers in the area looking for those kinds of bargains,” he says.
While some retailers might deem it impossible to compete with a discount outlet, the Sud family met the challenge head on. “If we didn’t take Home Bargains on, it’s potentially lost sales,” says Guna. So instead, he shopped around looking for good deals on short life or overstocked products.
“Our key focus on the promo bays, other than the two or three Premier Deals, are all our own pound deals on short-dated or clearance stock,” he explains. “Items are either £1 or a really, really good saving – as low as we can get, so the item might be priced at £1.50 or £2, but the RRP will be two or three times that.”
Coke 1.5l bottle four-packs have been really popular. “The RRP at Booker is £8.99. They come on deal at six or seven pounds. We’ve got them reduced down to £4, so [it works out at] £1 a bottle.”
Big brands at reduced prices are particularly powerful, he notes. “We try to be more competitive than the Home Bargains store. If they have a deal on off-brand multi-packs of crisps, we’ll try to run it on branded multi-packs. We’ve got flavoured Wotsits in Cheese Toastie and BBQ at £1 for a six-pack, whereas if you go into Home Bargains and you’ll get an off brand for the pound. We try to keep regular brands and keep the price of them down.”
He analysed the figures before and after introducing the initiative at Wishaw, and realised that basket spend was up 15%. This spurred him on to roll it out across the board.
After several weeks of running the scheme, the cash and carry branch managers started to offer Guna short-dated items. “We talk to the Booker branch regularly and if there’s things that are short dated or overstocked, they’ll send over a couple of pallets,” he says.
He has a distribution warehouse in Hillington where roughly half the space is dedicated to the pound deals. “A lot of these deals we have to buy by the pallet and then we distribute it out to the sites. That’s the bigger cost of it – being able to buy it in bulk and distribute it before it goes out of date. Those items are all on our automated warehouse ordering system. It just gets boxed out twice a week to the sites. All our vapes and kegs are distributed from there too, so adding a few extra items is not a major cost increase.”
Sold rush
In addition to filling up the deal bays, the stores have also introduced a special till deal. “We’re now running every week one core deal on the till for staff to upsell, such as Snickers Duo bars at two for £1, or KitKat Chunky four for £1,” he says. “When we first started telling staff, everyone was quite hesitant to do it. But as soon as the first customer said yes, they got that rush.”
His managers are equally motivated. “They are hounding me for stock – ‘customers want this’, ‘we’ve sold out already’, ‘you only gave us two boxes, we need more!’” says Guna.
By constantly bringing in new products, customers are driven to visit the stores more regularly. “They’re more popular than ever now – people are coming in much more frequently and going to those bays to see what new deals are on them because they’re changing every couple of days depending on what we get in. At this time of year especially, it’s more important that those bays are there and that they’re accessible for customers and that we’re passing on those deals.”
And of course, there are plenty of additional sales to be made once people enter the store. “It’s not that they’re only shopping for the deals,” says Guna. “They are picking up other items as well, it’s just that they’re drawn in looking for that next deal. They’re trying to get as much value as they can from those bays.”
Running the deals requires constant analysis and the bay offers are tailored to each store. “The promo bays we tweak depending on store size and demographic. Some of the smaller stores can be quieter, so we’ll give them a week to sell through a promotion. If there’s not many sales we’ll move that stock to a busier site and give the small store a fresh new item.”
The deals have not only encouraged customers to visit the store more frequently, but they have also convinced people to re-evaluate the stores. “Even in Bearsden, people would come in thinking it was a bit of an M&S – a bit pricey,” says Guna. “But we flooded the bays and filled the shelves with pound, pound, pound and instantly managers said people are coming in saying we’re really cheap and asking, ‘When did the pricing change?’, even though the rest of the store pricing is the same. Because they’ve picked up three or four items at £1 at the front, customers are much happier in their heads.”
Pump up the volume
This change in mindset is the real gamechanger. “When we looked at the overall promo bay sales and the margin versus the new sales and margin, we’re making the same profit, it’s just the volume is much, much higher at a lower margin,” he says. “But it’s great when you hear customers say, ‘It’s really cheap, that’s a really good deal.’”
The pound deals have now become central to the stores’ success, as Guna explains: “The cost increases [caused by the budget] made a massive difference on the cost of running the sites; the margins are getting tighter and tighter, especially with these pound deals. We’re working on wafer-thin margins for them and the budget doesn’t help, but we still want customers to have access to those value products.
“When we look at month-on-month sales of this year versus last year, we are still up across the board. We talk to other retailers and some of them are not seeing the same thing. Having the pound deals makes a massive difference for customers that are watching their spend. They think of us as their cheap local convenience store.”
Imran Ali of Bourtreehill Supermarket in North Ayrshire also specialises in deep discounts.
“We offer Mega Deals with a guarantee that we’re cheaper than any supermarket or any online website,” says Imran. “I usually shift a pallet within two or three days, so it goes down really well. I have built a good reputation for that over the last three or four years. I’ve got really good contacts I’ve built up over the last few years now, so I’m always getting offered something.”
His jaw-dropping deals, which are regularly promoted on social media, are part of the reason the store has 6,500 followers on Facebook. “Every week I’m getting new products – I’ve just had three pallets of Coke Zero 2l. It’s down to £2 for the full case. So these bottles are price marked at £1.99 each so that’s nearly £12 worth customers are getting for £2!”
As well as acting as a footfall driver to the store, Imran has more recently added the deals to his online offer, which in turn encourages more people to sign up. “I’ve started offering it on Snappy Shopper too and that makes a difference,” he says. “People who aren’t local to the shop can still get the same deal delivered.”
Pillow talk
He doesn’t just draw the line at groceries. “I’ve got hotel pillows price marked at £40 and I’m selling them for £8.50 or two for £15, so that one went really well and it’s not something that your typical shop would sell. I didn’t realise people liked changing their pillows often!”
Despite offering cheap goods, he still makes a healthy margin. “I make a minimum of 20% but can make as much as 40% to 60% as well on them,” he says. “Customers get a fantastic deal; I get a fantastic deal; and the supplier gets to clear away their stock as well. Everyone’s happy.”
He is now sharing the discounted goods with his peers. “I’ve linked up a couple of retailers in other villages so they can pass on some deals too,” he says. “It helps me clear extra stock away. It means that I can buy two or three pallets in bulk and then I don’t have any worries about getting rid of it.”
His aptitude for running these types of promotions came from his previous role. “I used to work as an area manager for local pound shops, so I’ve kind of brought that into my own convenience store now.”
Over time he has dedicated more space to the promotions. “I’ve got custom-made Mega Deal tables for our weekly specials. I’ve also got half a dozen custom-made dumpbins and I’ve got my middle aisle made wider so I can dump full pallets in and customers can still walk around it. I’ve also got a five-metre additional bay, so I’ve adapted the shop so that when customers come in they get hit by the Mega Deals.”
But while the prices of promotional lines are exceedingly low, other products command considerably higher prices. “My shop’s actually pretty premium, so my water, my milk, my bread, everything is premium,” says Imran. “A lot of my products are having to be marked up due to shoplifting, inflation and the minimum wage going up, but when customers come in, they get that illusion that these are crazy deals – it’s quite a fine balance.”
Offering a small selection of truly standout deals can completely transform customer perceptions, concurs Guna. “The biggest thing is that the customers are happy,” he concludes.
“It’s not about selling thousands of cans, it’s about building that trust with customers and giving them real value.”
